Jeff Bezos Eats Kittens

Astute readers will have no doubt noticed that I provide links to buy my books via Amazon.com and Amazon.co.uk in the sidebar to the right of this web page.

Really astute readers will also have noticed that I don't link to Kindle ebooks — only to hardcovers and paperbacks.

There is a reason for this.

Payola is "the illegal practice of payment or other inducement by record companies for the broadcast of recordings on music radio, in which the song is presented as being part of the normal day's broadcast."

Amazon isn't paying me directly to put those links on my web pages — but if you click through and buy one of those books from Amazon I do get a kickback of between 1% and 4% of the cover price. It's not strictly payola as such, but I will confess to whoring shamelessly for Amazon gift vouchers. In my defence, let me add: this blog is hosted on a server that I rent for the thick end of US $1000 per year. And I refuse on principle to take third party advertising or hang out a tipjar. The Amazon affiliate links are my sole way of directly monetizing this blog, and in a good year they cover as much as 25% of my server costs.

But it's not like I make a lot of money off Amazon. When you see the cover price of a book discounted by 30%, you should ask where that 30% is coming from. Normally, booksellers negotiate a discount off the cover price when buying books wholesale from the publisher or distributor. A normal discount for a small bookshop is on the order of 40-50%. If Tesco decide to push the latest Harry Potter as a special offer, they can get up to 70% off ... at which point the publisher is barely breaking even on manufacturing costs: the reason they put up with this steep level of discounting is that it just about guarantees the title a spot in the top 5 bestsellers, which is marketing gold dust (and will drive sales elsewhere). When you see a hardcover sold by Amazon at 30% below retail, the conclusion you should draw is not that Amazon are giving you a bargain out of the goodness of their heart: it's that they've have bent the publisher over a barrel and are screwing them for 60% to 70% of the cover price. Clawing back 1-4% off that discounted price (a chunk of which discount probably came out of my royalties) is just my way of making the best of a bad deal.

(I'd link to other bookstores as well, but none of them seem to have affiliate schemes — and maintaining those links takes time and energy. I've got about seventeen books in print, typically in two or more editions, before we even consider translations; if Borders or B&N want me to ride herd on a farm of thirty-plus links, some kind of sweetener would be appreciated.)

I don't link to Kindle ebooks because Amazon don't pay an affiliate fee on them. And thereon hangs a story ...

As I've said in the past, the price structure of the commercial ebook market is broken — for a variety of tedious reasons, publishers try to sell ebooks for not less than 80% of the price of the cheapest dead tree edition currently in print. (And then for different but equally tedious reasons they expect us to accept DRM on top.) This is a deeply annoying situation and it has stunted the growth of the ebook sector for a decade or more. Today, even a top-selling ebook edition is lucky to make 10% of the sales volume of a mass market paperback edition of the same book.

When Amazon came along, with the Kindle, a device to which my first reaction was highly unfavourable. My initial fears have been borne out; while Amazon fixed the Kindle's aesthetic problems efficiently, their behaviour towards customers has not been good — as witness the 1984 scandal. Mind you, that pales into insignificance compared to their behaviour towards authors: the gay deranking scandal may have been hastily denounced as an accident, but it shows that they've created a frighteningly efficient machine for imposing ideological censorship, should they choose to do so. What's even worse is that they seem to be close to achieving iPod status in the field of ebook readers. The dangers of a monopsony arising in ebook distribution can't be overemphasized, and should be obvious.

Now, why don't I like the launch of the Kindle in the UK?

Answer: because it looks to me as if Amazon maybe using it to screw authors and publishers.

According to The Guardian:

Although customers will have to order from the United States for the time being, Bezos said in a note to British customers on Amazon.co.uk that the gadget would eventually be sold through the company's British outlet.

"In the future, we plan to introduce a UK-centric Kindle experience, enabling you to purchase Kindle and Kindle books in sterling from our Amazon.co.uk site," he said.

Let's unpack this, shall we?

What's happening is that Amazon are making Kindles available in the UK with US content.

The US Kindle store caps book prices at $9.99 — even for hardcovers that normally have a retail price of $23.95 and which would typically cost $16 in dead tree format via Amazon. Amazon gets the books at this price by taking the publishers for a huge, Tesco-like discount (and by saying "screw you" to the small fry like me, who are looking for our points on the referral scheme). They've gained enormous leverage in the ebook market by acquiring first mover position, and they're exploiting this to break down the separation between hardcover and mass-market price points. I make literally five times as much money in royalties per $24 hardcover as I do per $8 paperback. I'd like to be able to make that money off $10 ebooks via Amazon, but my publishers (and their contracts departments) aren't set up that way; we're locked in place with legal boilerplate written years ago.

Why is there no UK Kindle ebook store? And why has it taken them so long?

One nasty suspicion of mine is that Amazon were demanding discounts so ludicrous that publishers would be making a net loss on each book sold after expenses and royalties. It's in line with their established business practices, as far as I can tell. Speaking hypothetically: if this was the case, and nobody was willing to do business with the ebook monopsony from hell, might the monopsony from hell respond by using its market-leading position to punish the recalcitrant European publishers and bring them to heel? And if so, wouldn't facilitating grey market imports be one way to do that?

You might think that if this were the case, it wouldn't harm anyone but a bunch of fat-cat publishers. However, when war breaks out it's not just the combatants who get hurt. There is a convention in English language publishing called the trans-Atlantic rights split. A relic of the days when trans-Atlantic shipping was expensive and slow, it's a provision whereby English Language publication rights to a novel are usually licensed in two tranches — one for North America, and one for the UK and the rest of the world. These days you can also sell World English Language rights, in which case the acquiring publisher typically sub-licenses them to someone local to the other territory. If you're a writer, you prefer to sell separately — if you can negotiate, say, 10 gold pieces for North American rights, you can probably get 4-5 GP for UK/Commonwealth rights — but a world rights sale will only get you 12 GP. The split, in other words, persists because it's in authors' interests to maintain it.

If Amazon are trying to break the trans-Atlantic rights split, that's going to ultimately cost me 20-30% of my (English language royalties) income. Even if they don't succeed, they're going to trigger a damaging price war between my US and UK publishers, or a bout of "let's you and them fight" litigation as British publishers sue to keep US grey-market imports out of "their" Kindles. If this were to happen, nobody would benefit from it — except Amazon, who would get rich off other folks' income stream.

So, to summarize: what have I got against Amazon's Kindle?

1) DRM. (It's unethical, immoral, fattening, and a royal pain in the ass. To be fair: this also goes for other ebook platforms.)

4) They're using their monopsony position to fuck over their suppliers (i.e. the publishers) in a manner that threatens a catastrophic crash in author royalties in the medium term (up to 5 years). NB: as a reader, you may enjoy the short term price benefit, but you'll pay for it in the long term in reduction of choice.

5) Their actions may start a trans-Atlantic price war between publishers, to the detriment of authors (again, in the medium term).

We desperately need a sane price structure for commercial ebooks, a better answer to English language rights licensing, and solutions that make books easier and cheaper for readers to get hold of while enabling authors and editors to continue to earn a living.

125 Comments

1,2,3 sure but 4 is rather self-inflicted. I certainly agree with the last part, but Australians have long been 'paying for it' and donating excess money North.

As far as the Transatlantic thing if there was only one market then choice is increased for anywhere not Australian or NZ, isn't it? You are suggesting the authors that would give up would outnumber the increased number of titles sold to everyone?

Why is World

Commercial ebook market is insane, definitely. Quite a lot of it no-one will sell us.

Blue Tyson: there's also a third English language split -- AUS and NZ. Unfortunately the leverage you need to make use of it is basically to be an Australian/NZ author with a good agent -- but it gets you another 2GP on top.

If you want to type a < symbol, type &lt; (and re-do it after hitting preview, dammit)

Blue Tyson: what happens is, if you sell world rights to a publisher, they'll publish it in their own territory -- then an underpaid clerk gets to re-sell the rights to the book to publishers in other territories. They'll do a worse job of re-selling than a literary agent (who is on a percentage commission). Consequently, it'll be bought by foreign publishers as cheap midlist filler, and they won't market it terribly hard.

Case in point: when my books are sold direct to a British publisher by my agent, they typically go for a lot more money, and get promoted much more efficiently, than when a US publisher who has acquired world rights re-sells my books to a UK publisher.

It seems to be some kind of market inefficiency -- and a very annoying one.

Certainly makes sense that an agent, who presumably has some sort of selling ability does it you get a better result than if it was, say, me--Hi Darleen, you want this new Stross book? Ok, done. Got your footy tips in?--

So authors of international interest need multicontinental agent power so they can do lunch in the flesh, so to speak?

So inefficiency why - other than the too many authors for agents part or publisher prefer paying less part?

Not enough triple continental interest in most writers to fill the gap with some sort of agent subcontracting?

Blue: a lot of this business still runs on face-to-face contact. If your publisher don't know you from a hole in the ground -- if they bought your book as one of a job lot of 12 midlist titles -- they're not going to put a lot of effort into marketing it. If on the other hand they paid you a decent advance and acquired you themselves, they're going to want to push your books and invest in your career in the hope of making a ton more money down the line.

If I recall correctly, Amazon is currently subsidizing those $9.99 books, and taking a loss on every one sold. This explains why many books (especially F&SF books) emerge at prices way higher than $9.99. Amazon usually waits for them to reach some sort of sales level before applying the subsidy. David Anthony Durham's "The Other Lands", for instance is being sold at $15.54 right now, instead of the $9.99. It also explains why they eliminated the associates payback --- they're already taking a loss, and can't afford any more losses.

The truth is, I don't expect hard-cover pricing to be sensible for e-books. With the DRM, there's no chance for the book to be sold "used". (And used books don't make sense in the ebook market --- that would be called piracy) So I expect that publishers and authors that expect hard-cover pricing on ebooks to be in la-la land.

I've bought more of your books than I would have because of the Kindle --- I have no more shelf-space at home for your books. If Amazon had not discounted "Wireless" or "Saturn's Children", I think I would have checked it out of the library instead. As it is, I read the book on the Kindle, wrote my reviews, and sold more of your books to my friends (through Amazon affiliate links --- many of my friends don't have Kindles yet), and I don't think that could be a bad thing for you.

I guess it's good that I use the Sony 505 reader, then? I had a gut distrust of the closed-loop system Amazon used with its reader, but the Sony reader leaves me total control, so I prefer it.

I did just buy The Jennifer Morgue for it; I hope you get decent royalties from those sales. I'd had the paper version on my family wish list for more than a year, but no-one bought the thing for me, and the local bookstores just never carried it.

I have to say that I still really prefer browsing a physical bookstore than online one, but I've got several hundred novels & short stories on my reader already, so I guess my urge to read wins out.

I'm looking forward to seeing how well http://www.irexreader.com/ and http://openinkpot.org/ do. Currently I read ebooks on my G1 using FBReader under Android - it doesn't support DRM, but I'm okay with that; it means I buy books from webscriptions.net and fictionwise.com instead of amazon. It also means I can easily back those ebooks up and so have less fear of losing them.

Kindle prices aren't capped at $9.99. I've regularly paid up to $15 for fiction, and more for non-fiction. That $9.99 max seems to have faded after the initial introduction of the product. In general, Kindle books are only steeply discounted when they're being compared to hard cover books. Trade paperbacks that go for $6.99 seem to end up costing $5.50 to $6.50 on kindle. Except the first one I went to check was the Family Trade, which is $6.99 paperback... or $6.99 kindle. I clicked through a bunch of your other novels (that I already own on dead trees), but they all seemed to be out of stock, so my only options were paying $6.39 for the kindle edition or buying used copies from Amazon partners (which I won't do if I can help it - they're about like eBay sellers for reliability).

Given the evidence above, they might not even be paying less to the publishers for digital copies except on hard covers. As a consumer I'm actually buying A LOT more books to read on my kindle than I did when they were hard copy. It's convenient, better for the environment (no emissions for shipping, fewer dead trees, etc), doesn't get damaged by light precipitation and has the magical property of syncing my reading between my Kindle and my iphone - so even if I wasn't planning to I can pull out one of my current books and read it wherever I am. I actively prefer the Kindle experience to the printed book experience for anything that doesn't rely on illustrations or tabular data.

Book spending in my household more than doubled when we got Kindles. For authors to get screwed by that, they'd have to get less than half of the royalties they would on a hard copy. Each author makes less on each copy, but if other folks are acting like we are then there's a lot more copies being sold. I'd love to know what the actual prices Amazon pays to the publishers are. Finding out that that $6 kindle book ($6.99 trade paperback if I bought the dead trees) paid

So the same agent sometimes sells world rights to one publisher for one book, but may split them for another? (and the one world people could clearly sell the ebook to everyone if they wanted to, as a result?)

That doesn't make sense to me I think: if agents make money from commission from sales and they do better with individual negotiation? Not from the agent's point of view, anyway. Is that then a resource or expense issue - not enough time, ability to travel (Australia) etc. for them?

I must be some kind of paper hard-liner. E-books have never seemed attractive to me, with the exception of small-run obscurities that don't look likely to ever have a paper edition. I don't do the kind of travelling that makes them attractive on portability grounds, and I don't intend to start now: carbon footprint.

The changes of my ever buying a Kindle went to zero when the deletion business happened. They may say they won't do it again, but the fact remains that they can, which, for corporate America, simply means that they will when the embarassment of not doing so is too large. So my e-book buying will remain limited to non-DRM'ed PDFs that nobody can control once I have them. The same kind of ownership as with paper.

I'm one of the people that buys hardcover first editions of the stuff I really like (you, Stephenson, Erikson, etc). I'm also one of the people that has a lot of trouble putting the books somewhere (and it's not getting easier). I've been thinking about e-books for a long time, but the DRM stuff is not something I'll pay for.

So, Kindle - drm and fucks you over, downloading the book and donating to you - still not good, and storing the books is pain in the ass. I'd love any good idea on how to solve this dilema:)

I notice UK customers can't buy Charles Stross books in the Kindle store anyway (Apart from Lobster for some odd reason :) ). In fact from what I can see the sci-fi/fantasy selection for UK customers is actually very, very rubbish indeed. Almost all the sci-fi "bestsellers" are actually public domain and a few random searches threw up pretty much bugger all I'd want to buy and lots of gaps for stuff I would want to buy.

I'm presuming Amazon are going to need to open up local stores as quickly as they can. Wouldn't this be the chance for local publishers to fight for the better ebook deals? What does your UK publisher plan to do when Amazon come knocking Charlie?

Disclaimer: I don't read ebooks, and I dislike the idea. Books *smell* nice, and I like the heft of one. So I know nothing about the current state of the market...

Here's what I don't understand: why do you need to go through a publisher at all? Can't you sell your print-it-on-a-tree rights and your electronic rights separately? If so, is there any reason (in principle!) why you couldn't run your own ebook server, or get together with other authors and run one collectively?

I know that's a lot of work, and you may not want to. But if you're getting cut out anyway, may as well consider it, right? And a store that is run by an authors' guild would surely be able to add extra value (interviews, deleted material etc.) that the more established stores could not match.

I'm thinking of some third-party reseller idea, analogous to iTunes or the app store, but run as a benefit to authors.

You could even run it as a non-profit, with the aim of giving aspiring writers who don't have a publishing deal somewhere to host their own work - maybe tie-in with Interzone or Locus, etc.

Sometime in the last century, Jerry Pournelle mentioned in an aside on his site, the fungibility of copyrights. I was reminded of this aside when the president of the Author's Guild had his snit fit over the Kindle's text-to-speech capability.

In the short term view, you're absolutely right, and even in the medium term view of the copse or grove, you're still correct. However, in the bigger picture of copyright discussion, attention has to be paid to what constitutes a legitimate piece of copyright, and what constitutes rent seeking business model protection. And I think regional copyright divisions (see also: DVDs, and note that simple regionalization is different than translation) will fall into the latter category. But I'm also betting that any such discussions are a ways down the road yet.

Also, put out an effing tipjar, man! Ain't no shame in allowing us to show our appreciation in a more direct way...after all, you've got to admit that Paypal is far cheaper middleman than Amazon.

What are the chances of you being able to go to a different publisher for your e-books. I don't know how much your contract locks you to a specific publisher, but you might see about submitting books to Baen. Their webscriptions is pretty nice. DRM free, and you (the author) gets somewhere around $1.5 US per book sold.

What are the chances of you being able to go to a different publisher for your e-books? I don't know how much your contract locks you to a specific publisher, but you might see about submitting books to Baen. Their webscriptions is pretty nice. DRM free, and you (the author) gets somewhere around $1.5 US per book sold.

For the tipjar and the downloading, Charlie wrote something pretty good some time ago (http://www.antipope.org/charlie/blog-static/2009/03/reminder_why_theres_no_tipjar.html ), it's even linked in the post :)

I just got a Kindle DX (well, my father was given it - did not use it, and gave it to me) and after having it for a week, here are my basic thoughts on the device and its ecosystem.

In hardware-land, it does what it needs to, and does it well (I can happily dump several hours into reading a novel on it, and given that it is the DX, I can also feed it scientific papers* and read them tolerably well). The cellular modem bit is cute, but I have not used it beyond some minor dicking around with their web browser and poking in the Kindle store.

In terms of its ecosystem, well... I am (mostly) unamused. If the standard paperback is $8 US and you want $7 for a version that is locked to my account without any right of first sale (or, hell, any ability to give it to a friend) I will quite happily tell the vendor who wants that to go pound sand. I may have a Kindle, but I have a very long-standing preference for dead trees.

The previous two points should have anyone who reads this wondering "Ok, so where are you getting stuff to feed the Kindle" which is an entirely reasonable question. First, a lot of what I read is published by houses that have genuinely sane ebook policies (e.g., Baen) and a couple of authors that I read like to give away copies of some/all of their work electronically.

Second, and this is where our host may justifiably be displeased with me, is that I have a personal policy of if I have purchased it in dead tree, I have no desire to repurchase it in DRMed Kindle format (ergo, I go looking for my eyepatch and me rum). At that point (I hope) the author has received the same income from my purchase (as I have bought a dead-tree copy) that he would otherwise - I just wind up with a copy for my shelf, and a copy for the gadget.

*With regard to scientific papers on the DX, which is one of its major appeals to a full-time researcher, reading them is fine (the PDF viewer does its job decently well), but there are two issues with doing so exclusively. The first being that the Kindle's in-line annotation system is bad enough for ebooks, and is utterly awful for PDFs. This means I am not giving up my fountain pens anytime soon. In addition, 16 levels of grey makes detailed figures barely comprehensible (in fairness, graphs and such are fine - but I do vision research and fMRI, which means stimulus figures and, more critically, activation maps). It is a useful addition to my range of gadgets, but it does not replace dead tree for me.

If there's a practical way of buying ebooks direct from the author, I'd do it every time, and I'd also contribute to a tips jar.

I've had a Sony eReader since its UK launch, and I'm very impressed with it. Watersone's website was a nightmare for finding ebooks (until they changed their search engine last week so you can actually search specifically for them), but the availability of ebooks by certain authors, and fantasy & sci-fi authors in particular, is still lacking.

As with the music business, the publishing business seems to be desperately hanging on to the old business model. The upshot for the music industry is more bands creating their own labels and bypassing the record companies - maybe it's time for authors to do the same, collectively if not individually.

It's things like this that convince me that we need a new model for distributing books, both paper and not, and compensating authors so they can continue to write. The Kindle, while doing good things for the visibility of ebooks, is otherwise pushing everything in the wrong direction. We're going more towards Amazon as the biggest decision-maker in the whole reading and writing process, and while this may be efficient, I don't see how it benefits readers and writers in the end.

I'd like to see the focus get back to paying the authors. They're the only part of the production and distribution chain that's not replaceable. Let companies like Amazon handle marketing and shipping and that sort of thing, but there's no reason they have to have this much power.

(I don't have a Kindle, but if my cyBook broke, I'd replace it with one.)

I quite like paper books, but honestly, that ship sailed for me a long time ago: I travel far too much, I have a nasty habit of moving internationally every 5 years, and I refuse to pay the Aussie book tax. ebooks, I say without any hyperbole, have transformed my relationship with reading (and it has nothing to do with price).

The DRM and threat of deletion are irrelevant to me, as the very first thing I do after buying one is run a script that turns it into boring old, no-DRM mobipocket -- essentially HTML.

I can fully understand someone not wanting to vote with their dollars in support of a DRM-based business model. That I even have to bother stripping the DRM, no matter how trivial, is of course an annoyance.

But on the other hand, I'm willing to vote with my dollars in favour of ebooks -- no matter their form -- and trust that sanity will win the day with book DRM in the way that seems to be happening with music.

I feel for you, Charlie, because you've confirmed what I long suspected about ebooks: that, as online video was for writers/directors/actors, it will be the "new technology" trojan horse that provides cover for retailers and publishers to unilaterally stop paying authors.

For me, though, the choice is between buying ebooks or reading far, far less. I'm not willing to go back.

I'm flustered that I missed your e-book pricing essay for such a long time. But considering that you posted this when I still had troops to lead (and no reliable net connection most weekdays) I realise how this one slipped me by. Your argument about e-book pricing is spot on. I think publishers don't realise that e-books if marketed along the Baen lines could be their salvation and might even increase their profit potential substantially a ways down the road (the "backlist effect" is just being noticed in online dlc music stores). Publishers are in the business of selling content that is preselected, quality controlled and edited (unless the author is very experienced there is a world of difference between a self-published book and a "regular" one, here lies the service the publisher provides), not in that of printing books. The printers are the truly threatened species of business here.

Now Bezos and Amazon, having realised the huge profit potential in e-books, are staging a market grab using their monopsony and the "DRM-scare" to impose their marketing concept on publishers who haven't yet realised what species of commodity they are truly selling. I bet in the long run Amazon is looking to generate profit for itself out of "Kindle" e-books that the publishers (and, through royalties, the authors) might as well have earned themselves if they only had followed the Baen/webscription model (all that while providing DRM free ebooks to the customer at a lower price compared to Kindle ebooks).

As to DRM, the above mentioned "backlist" effect in dlc music stores only took of when the price for a song dropped to a dollar and lower. The price for the "verified, official, high-quality, DRM-free, standard format download" was less than the cost in time and effort to find a high quality pirated version of that specific song and suddenly whenever an old song played in television that began to generate profit for the copyright owner via the sales in dlc music stores. This, along with the spotlight posed by Michael Jacksons death, made music copyright collections a "hot" investment item very recently.(refer http://www.welt.de/finanzen/article4262323/Finanzhaie-setzen-auf-Jacko-und-Elvis-Presley.html , welt.de in german). The Baen price range of about 50-60% of MMPB price hits the same point IMO.

Some of what’s being mentioned here appears to be the product of a publishing/agent system that isn’t set-up for electronic books that have worldwide distribution and have to compete with illegal distribution. The industry seems to be tied up in the same knots the music companies are just trying to get themselves out of. Why publishing hasn’t learnt from music is beyond me.

Nope. Or rather: so far, paper rights are worth 9-10 times as much as ebook rights, and publishers refuse to buy paper rights without also locking down ebook rights.

Also note that book publishers do a hell of a lot more work to help authors' sales than, for example, music studios do to help musicians. I could do the work, but energy spent on editorial/typesetting/production/marketing/sales is energy not spent on writing, which is what I'm good at and what I enjoy doing.

In the long term, Watch This Space. I maintain a typesetting/ebook production/editorial capability that I can deploy if the industry as a whole craters. But I'm not going to dip a toe in that water until it's necessary for me to do so -- I'd rather spend my energy writing than trying to be a publisher.

Incidentally, I buy ebooks. But I won't buy a product with DRM on it unless I can crack the DRM immediately -- so that I know I can read it on any future hardware I might buy.

TBR: Yes, all true. I'm hoping that's where it goes. Meanwhile, though, authors are being told to expect ebook royalty rates from traditional publishers to stabilize in the 15-25% of net range. And the weird bit? Despite the appearance of a rip-off, the publishers aren't making a huge profit on this. They've accidentally permitted a new intermediary to emerge and eat their lunch -- the one-stop stores (like iTunes or Amazon).

Leigh @28: part of it is legal boilerplate -- and that "long tail" backlist not being contractually set up for ebooks.

Ebook publishing contracts routinely incorporate territorial restrictions that made sense when books were heavy lumps of dead tree that had to be shipped as ballast in, well, ships: but that's not the worst of it. I've heard of publisher-to-publisher contracts for ebook rights that required stripped covers[*] to be returned for credit on mass-market ebook editions that failed to sell! I've heard of publishers spending tens of millions building a "virtual warehouse" in which ebooks, after being "virtually printed" could be stored pending despatch to ebook stores, with facilities for handling virtual returns of copies that aren't sold. All because they're trying to fit their ebook workflow and accounting practices to an obsolete contractual model.

[*] When a mass-market paperback is remaindered, the cover is stripped and returned for credit while the book block is pulped -- it's a hangover of the magazine distribution system that MMPBs go through.

I have a Sony Reader, PRS-505. It's over two years old; I bought it on a US trip when they first came out. I mostly use it with Calibre on the Mac for reading Mobipocket books that I've transcoded (I have a PID for buying DRM'd books and cracking them), or manuscripts sent to me by publishers for cover blurbs.

The PRS-505 is nice, but I'm left handed and the ergonomics of the page turn buttons suck -- after an hour of holding it I get cramp in my thumb or it digs a groove in my hand. I don't use it as a photo viewer or MP3 player, and have never needed the memory card slots, and even though it's currently got about 130 books loaded it still has over 30% of its memory free.

The new PRS-300 pocket reader (which I've seen in the flesh) fixes the location of the page turn button and does pretty much what I want of the 505 while being more portable, so I'm using some of those Amazon kickbacks to acquire one. (Meanwhile the 505 goes to a family member.)

Although come to think of it, the spousal unit could maybe come up with some from a large film company. Don't think I have one that good, in media company or out. Breakage charged to artists on mp3s is similarly entertaining, I suppose.

So they didn't actually build an ebook stripper and a system for virtual returns then? :)

I work in the academic library purchasing field, and have spent the last few years looking at the various ebook models - publishers really aren't keen, a rep from [a firm] I talked to complained that so much of their material goes onto scribd or similar sites almost straight away. Textbook publishers can't get away from their bulk volume sales model and bringing out a nw edition of the Tedious Book of Law (Revised International) every year.

To begin with, if Jeff Bezos really does eat kittens, then he's a good guy. Cats are eeeeeeevil. And annoying. And I'm alergic.

Second, I think there should be some expansion of Our Gracious Host's comments. Some of you may have noticed that he (correctly) called it a monopsony, not a monopoly. (And some of you may snidely — and, again, correctly — note that many of Our Gracious Host's comments at 32 also concern monopsony, not monopoly.) But what's the difference?
* A monopoly has market control over what is available in the market directly (or even indirectly) to the end-users and its price.
* A monopsony has market control over what market is available to suppliers and its price.
So, in a sense, a monopoly and a monopsony are inverses of each other. This leads to two critical points:
(A) If you're familiar with antitrust law and regulator consideration, you'll have heard of the HHI function, which purports to measure market concentration and the effect of mergers and acquisitions on markets. (<sarcasm>Gee, a merger/acquisition would never occur in the publishing industry, so why are we even worrying about it?</sarcasm>) And if you're familiar with the math involved, you'll spot that monopsonies cannot be evaluated under the HHI function, due to the multiple divide-by-zero problems introduced by inverting the terms. In turn, that means that regulators don't know what to do with monopsony mergers/acquisitions... so they tend to leave them alone, or pretend that they're just monopolies and look only at the direct consumer effects.
(B) And that implies the other problem. In order for a monopsony to exist, it almost certainly acts as a monopoly in a coordinate — but not identical — market.

Third, I think territorial rights are going to way of the dodo. They already have within the EU; an agreement for, say, a French-language edition in Belgium allows the Belgian publisher to sell that particular translation throughout the EU, even if the contract says otherwise (thanks to a decision a few years back involving earth-moving equipment and the validity of exclusive territories for identical, nonregulated goods — that is, grey markets). In the short term, and probably the medium term, this is bad for authors, because existing contracts rely upon the distinctions in setting compensation rates. In the long term, this might be good for authors... if they assiduously audit publishers for compliance. I suspect, though, that (as usual) the recorded-music segment of the entertainment industry, followed shortly thereafter by film and TV, will set the standards, and print will just follow along.

Fourth, what this really exposes more than anything else is that publishers' pricing models for the print editions are completely insane to start with. They are based not on content, but on packaging (leaving aside that the layout of a casebound book is usually somewhat more reader-friendly than a mass-market paperback... but usually not significantly). Consider, for a moment, the XBox 360 Halo Edition... and the fact that many serious gamers change its appearance (the "packaging") anyway. Now remember that if the publisher has done its job, for a work of fiction there's nothing different inside the box for a mass-market paperback!

I think the $9.99 price for new releases mostly gets used for books that they want to advertise on the front page. I think you hardly ever (maybe never?) see a book advertised or recommended for more than $9.99, but as others have already pointed out there are plenty of books in the Kindle store priced higher than that.

FWIW I think amazon is in a similar situation that Apple was with itunes. They are selling stuff in a way that the book/music distribution industry hates but that lots of people prefer due to price and convenience. The pricing and DRM issues annoy customers but are helping amazon get their foot in the door; once they build up enough sales volume then they have some leverage to use against a publishing industry that would prefer to keep their operations in the 19th century. Amazon is in the business of selling books and customers being able to read their product on as many different platforms as possible and with a minimum of technical hassle can only be good for sales. Hopefully they can do it in a way that doesn't screw authors.

CEP @40: yup, the trans-Atlantic split is going away -- the question is when, and how. I'm in for an exciting ride as a result.

Also, yes, the price structure of books is all wrong. What we currently have is a crude reverse-auction, so that the highest-priced editions come out first (to milk the early adopters/enthusiasts) and they get cheaper progressively -- but with too few steps.

I wonder how ebooks would sell if, for example, they initially came out at a $20 price, and the price depreciated by, say, 5% per month to a floor of $5?

E-books are simply unattractive to me because there's no way for me to loan the books I own to friends to introduce them to new writers, or to read a copy of something they own. That right there is a significant part of the pleasure of owning lots of books, but it's made next to impossible simply because publishers are trying to fight a battle that they've clearly already lost.

For people with good eyesight, what's the point of e-book readers? I've read the whole of Starfish trilogy from my mobile phone... no DRM, they're small, lightweight, the display glows.. and they play mp3s too :)

Phone displays will get better with time, I believe...

Seems to me to be a similar situation to what is happening with chain stores. Tesco & other chains has been fucking over farmers and food producers in my country, because, if they don't sell to them, what are they gonna do with their products? So they demand ridiculous prices...

I sort of wonder what's the solution to that sort of behaviour. Certainly not a legislative one, they'd just find another loophole.

I've got my Sony PRS-505 four months back and just by the "savings" in buying my Baen books hence solely as e-books (and all other decently priced ebook versions I was interested in from other publishers) I've already recouped the purchase price. Yes, I am that species of bibliovore...

What makes the Sony PRS-505 stand out among the other readers is it's "un-Sony-ish" openess as it does have an SD slot (I do need it) in addition to the memstick slot and can display several common (and easily converted into) formats. I actually prefer it to a MMPB since it stays open when laid on the table, doesn't give you inkblack thunbs and, since I usually took along not one but two books (to avert withdrawal when reaching the end of the first book), some of them definitely more hefty than the PRS, it is quite a weight saver (not to mention the attic space problem). The feel and eye strain during reading is the same as with an MMPB and makes e-books finally accessible to me since I couldn't truly enjoy reading books on backlit devices. The one drawback is that you can't really use it to read in a sauna... (and that the print on the pageforward button wore down early)

Sure wish I had one during my seafaring days (even as rating I had more books in my locker than the ships library).

BTW - Thanks Charlie for posting accelerando on a single webpage, this made conversion into pdf pretty easy and uncomplicated.

E-books are simply unattractive to me because there's no way for me to loan the books I own to friends to introduce them to new writers, or to read a copy of something they own. That right there is a significant part of the pleasure of owning lots of books, but it's made next to impossible simply because publishers are trying to fight a battle that they've clearly already lost.

Very likely keeping that good eyesight. I personally loathe reading on my phone's screen, and I mean... My G1 has a pretty decent screen.

Eh. I doubt I'll be picking up an ebook reader anytime soon, I remember getting one for christmas about 6-7 years ago, an old crappy (not for the time, admittedly) sony model... I didn't use it once. Biggest waste of a few hundred dollars ever.

Clearly we need Gabe Newell to put on his cape, and expand Steam to include e-books as well as games. Obviously that's ridiculous, but I could see something similar being successful. There could be a "Charlie-Pack"! in which you could buy everything charlie has ever written at a bundled discount, and gift the titles you already own to other friends. Valve really has a cunning business model, and it seems to benefit everybody except for gamestop.

Don't see any reason why any other digital entertainment shouldn't be sold in the same way.

Adding to what Charlie said @32 about self-publishing: I'm published by a small press specialist epublisher. Looking at the number of copies of novels people have bought from my publisher's website, versus the number of downloads of the free promo shorts in the same series from my own website -- I think I'm *much* happier taking 35% of my publisher's cover price than 100% of a self-published book's cover price.

FWIW, Tesco (and all the other supermarkets) are the ones over a barrel when it comes to Harry Potter (And possibly Dan Brown). Bloomsbury took great delight in telling Asda that they couldn't have HP5 unless they paid all their outstanding invoices. Asda caved knowing that if they didn't have HP5 on display on day 1 then a lot of people would be doing their weekly shop somewhere else that Saturday.

I can't see the division of English speaking rights lasting in the digital age. You're not shipping books as ballast any more and readers aren't going to put up with waiting for a local digital edition when they can see one on Amazon.[ca|com|nz|au]

It seems to me that the process of discounting in various markets is a form of price discovery. Some people will buy a book at full price for the hardback edition, some will wait for the paperback and some will purchase on impulse when they see the book as part of a deal. There's no way that the impulse purchase at 30-40% off list will ever be replaced by a full-price purchase but the author is better off with a partial sale than no sale. The digital edition is another form of sale with more possibility of picking up impulse purchases.

Finally, I can't wait to see what happens when some 3l33t haxx0r p0wns the Amazon servers and starts removing books at random from Kindles. I'm sticking to the dead tree versions for the time being.

"I wonder how ebooks would sell if, for example, they initially came out at a $20 price, and the price depreciated by, say, 5% per month to a floor of $5?"

Yep, that's the kind of pricing that should be explored in digital distribution.

Also the "weekend specials" Valve are doing with games seem to be wildly successful. Price an ebook 50% off for a few days. This is noticed mostly by genera enthusiasts and frequent readers, then get full price word of mouth and gift sales from/for friends and family.

You also might be able to set up the pricing to get additional sales for writers with a number of books written like our dear Mr Stross. Your new books become more of a leader to sell the back catalog as everything is always available electronically.

So the transaction used to be $30 for a hardback and maybe $10 for the paperbacks that are still in the stores if the person likes you writing. Now it's $10 for the new book and $20 for back catalog that is always available electronically. That could be five books at $4 a piece, or even a "Stross Box" of every back catalog item for a lump sum.

Can't publishers turn Amazon into a channel, instead of treating them as a retailer? I thought it was possible to upload your book/content and set your own prices, Apple AppStore style. Isn't that how the whole 1984 problem came about?

I mostly buy from fictionwise.com because they have reasonable prices and discounts, but of late I've been ripping a pile of old SF hardbacks I bought for $20/box. Many stories I have not seen before as they're mostly compilations. I expect I'll sell them once I've ripped them because I'm not interested in the physical souvenirs. ("ripping" meaning "photograph, OCR and proofread each page").

Like Charles I use a 505 and Calibre, and unashamedly remove DRM before reading. One side benefit of that is that I can force the books into zero margins with 7.2 point text so they're easier to read. Manufacturers have got that part of ebooks all wrong... I fear that the layout is done by graphic artists rather than people who read books.

Amazon may be evil but for now, I don't know another entity that would be able to take its place in my life.

Step one: I'm Austrian. We speak German. In the olden days, when the Austrian currency was one seventh of the German one (locked), bookstores in Austria would sell all books for the German price .. times ten, not times seven. That was the so-called book-conversion. The only reason: "it's the way we've always done it (and we can)".

This was, in fact, afaik not stopped by the EU but even before the EU could step in by the existence of amazon. In that I simply stopped buying anything at local bookstores. Because if I have to pay significantly more simply because I live in the wrong country, I'm not really thrilled.

Thus, my relationship with amazon started.

Second point: Nowadays I almost exclusively read english language SF. All the local stores I know (in Austria as well as Germany wherever I have been) carry only a few authors and always, ALWAYS only the one latest novel by said author in their store. The alternative has always been to walk up to a clerk, tell him "I'd like to order X by Y", whereupon he would misunderstand me, not know book or author, mistype name/title in his computer three times and in the end the ordering-process would, for reasons completely unbeknown to me, take 2-3 weeks. Then I would have to walk to the store a second time (during opening hours, i.e. basically 9-5 i.e. during my work-time) in order to pick up the book. Well fuck that. I realize I want something, I go to amazon, click on it and I have it ON THE NEXT DAY (thanks to amazon prime membership). Without ever leaving home/work. Which is good because I really don't have time to spend shopping.

Also, Amazon sells loads of other things besides books. except food, I guess. So I could almost live off of amazon.

The Kindle, OTOH, I don't need. Right now, I still read ebooks (exclusively of the free variety) on my old palm tungsten t. As long as there isn't an ebook-reader (by which I mean e-ink device) with that form-factor (as in fits nicely in my pants-pocket), I'm not interested.

on the gripping hand, I will most likely be getting a Nokia N900 soonish, and I guess I'll then use that for reading.

So it's not because of some stupid DRM system but because of the dividing line between america and england for book publishers that I can't buy some ebooks ? That's soooo frigging illogical !

A book is sold to publishers in America and no one bothers to sell it to the other side ?

Gah! I keep finding books on BooksOnBoard that I want to buy only to get frustrated at the checkout line... sorry, this book is not sold in your country. It's like they made it so that the dark force of frustration is calling me, tempting me to go to do a quick search on rapidshare or torrent sites, where sure enough most books can be found.

To anyone who thinks e-readers aren't the way of the future: you're wrong. Think CDs -- there are fewer "record" stores here in Sydney than there were a few years ago. I expect it's the same where you live.

Your traditional bookshop is screwed.

E-readers are currently a bit so-so, not good enough for mass market adoption, but give the technology a few more iterations and they will soon be compelling. In ten years time perhaps your Applezon iTablet will be passive high-res colour e-ink.

Apple has to be interested -- the e-reader market is a another opportunity to see applications. Apple already has the infrastructure in place to out-Amazon Amazon (at digital content). They just need the right hardware.

Obviously Charlie's a bit concerned about eating in the future, but there's a bigger concern for us readers: where's the editorial process going to occur? Who's going to sort the wheat from the chaff? If it's too easy to publish how am I going to find the good stuff? It's difficult enough now to find a good novel in a bookshop (especially a fantasy novel, goddamn do they all have to have dragons in them? After 3,000 DragonDooze novels I'm done. A book has dragons? I throw it across the room).

Uh... where was I? Right. e-readers will kill bookstores. And sooner than you think.

@ 18: I'm also one of those people waiting for old favourites to be released in ebook format. In the case of Erikson's door-stops this will be a welcome relief, I can get my shelf space back.

My irritation with purchasing ebooks is the geographical restrictions (I live in Australia). You can waste hours on some of the commercial ebook sites only to discover that you can't purchase your choices and download them to your non-US/Canadian country.

Leaving aside the insane fact that there is nothing wrong with my money and a business is refusing to commit commerce - I can buy the dead tree version and have it shipped half way around the planet for about the same price.

Speaking as someone who reads lots of ebooks, and is currently 79.95% of the way through Anathem on my iPod touch (probably the longest ebook I've read on the touch so far), I'm a lot more interested in Amazon making their Kindle app for the iPhone available internationally than I am in the ugly, badly designed Kindle itself. Alas there is no mention of this happening in Amazon's announcement.

Like Cath @61 I live in Australia and now that Fictionwise, etc. have started enforcing the 19th century geographic rights on ebooks it's thin epickings alas.

As to those geographic restrictions - it is my understanding that they are not enforced on pbooks ordered by (or on behalf of) individuals from overseas/out-of-territory suppliers like Amazon US thanks to specific provisions in Australia's copyright law (our forefathers were far-sighted enough to see the importance of allowing citizens access to knowledge even when a local publisher didn't think it worth buying the rights to a particular book. If only today's politicians would climb onto the shoulders of past giants and see as far). IANAL but I suspect that said provisions probably should apply to ebooks too (I'll bet it just says "books"), but no one's gone to court over it because the ebook market's not big enough, yet, and lawyers are expensive.

2. Ability to format once, flow to multiple destinations, including from iPhone to table computer to print.

3. Licensing, new model for renumeration and a price structure that will start off with a ebook and go up as the added value increases (illustrations, interactives, high end hard-bound archival book edition, with some sort of a nod as to quality of content.

4. The main question appears to be how to ensure recovery of the production costs. I'm thinking that there may be a lesson to learn from the comic book market in that the technical ability to do a thing led to an explosion of the genre at all price points, from fanzines to oversize graphic novels. Also, from the Apple iTunes store.

5. I can forsee e-books taking the place of the dimestore novel (which was, compared to the more expensive books that came before, the market buster and expander of it's day) and materials that need to be updated frequently.

David S @62, apropos Fictionwise, here is a hint: buy micropayment credits. Then change your address to somewhere with a legit zipcode in the continental USA. (Say, the HQ of a publisher who is annoying you with regional restrictions.) Then buy ebooks using micropay credits instead of a credit card or paypal.

The same technique works with the iTunes store and gift vouchers (if the gift vouchers are sold in the USA they're valid for purchases from the US store).

While they can check your registered home address is legal, and check the country that the bank who issued your credit card is based in, they're not yet able to track transitive dependencies between gift voucher/microcredit purchases and their deployment. (And probably they won't bother. If nothing else -- how would they know that the gift vouchers aren't, like, gifts that have been given to someone in another country from that of the purchaser?)

The publishing cost/pricing model for production and distribution and has been increasingly rickety for the past decade, and the (latest) iteration of ebooks is merely another hammerblow. It no longer makes long-term sense, but the uncertainty of moving to a new model is making many cling to the dimishing returns on the old one. And ebooks, to be honest, merely make that myopia especially obvious. The fact that for an ebook, some costs simply do not exist or are at best minimal (production - including over-production and returns/strips, warehousing, distribution) has not been absorbed except in the sense that the saved costs equate to improved profit margin for the producer. Which would be okay if those savings were not also visible to the consumer! Throw in the limited nature of the utility of the digital product compared to the dead-tree version, and you're looking at a high-cost/low-utility product that will remain fairly niche for a long time yet, notwithstanding the ongoing articles in the press (general and trade) with titles like "Will the ebook mean the death of the traditional publishing/bookselling/intellectual property model?" Ebooks won't kill off publishing and bookselling as it now stands, you can forget about that. It'll just make the promotors of moribund business practices dig their heels in more.

Far more significant, as Charlie says, is the implications the Amazon move has in terms of the distribution/delivery model (i.e. how books get to the reader), which moves from being skewed slightly toward the retailer to something heading toward monposony, taking in the whole digital+print picture. That's scary in the long term, as anyone who's watched Tesco/Walmart over the years can testify. Consumers appear to benefit, as prices fall or stay low, but their is no visibility of how the supply chain is squeezed and intimidated behind the price sticker.

And for authors, it's compounded by their industry-standard contract conditions, which are rarely (ever) open for debate at signing. Authors are, with the exception of the obvious outliers, like a scattered group of artisan craftsmen - think Harris tweed weavers - who have a one-on-one relationship with the entity who creates the output, so their options for negotiation and give-or-take are limited.

So, maybe a real question is whether authors need to begin properly organising themselves, along the lines of Equity/SAG/SWG, with an initial goal of re-negotiating the default boilerplate that goes into every publishing contract on the subject of rights and exclusivity? With that opened up, it would hopefully follow that alternative distribution methods a la Baen would become feasible. I'm not sure what leverage authors could bring to this though...

Perhaps another way to look at it (and I'd much rather be wrong) is that the golden age of the volume-selling novel produced by the self-employed artist is coming to an end, and the people who work in the field will have to diversify their talents. I've read Cory Doctorow say that he makes more money from public speaking than he does from his books, and in that he's in no different a place than Mark Twain or Charles Dickens were over a century ago!

- It seems that if prices are kept low for ebooks, there's a good chance that you'll make more sales than you would from hardback books, or even the various paperback formats. People who buy ebook readers (of any brand) tend to be bibliophiles -- the causal reader isn't going to pay hundreds of dollars/pounds/euros for a dedicated device. For financial reasons, many of these people may have been buying paperbacks or used books, or using libraries. In my mind, I see ebooks cannibalizing the used book and paperback market more than the hardback. If I buy a new hardback it's because I really like the author and want the physical object to display and keep.

- If other big players can get into the game, then it will help avoid a lot of bullying from the sellers. It will be much easier for publishers to refuse to sell to Amazon if B&N and others are offering better deals. B&N appears to be working out deals with multiple ebook manufacturers, hopefully that will work out. The other big player I keep expecting to jump in is Apple. Even without a dedicated reader, they could easily add an ebook section to iTunes that worked on laptops, PCs, iPhones, Touches, and whatever mysterious tablet they're working on. Microsoft is another potential player, though probably they'll fumble like with the Zune.

@64 Thanks for the tip. I live in europe and wanted to try the eBook thing, and the only option was fictionnwise. I bought this micropay thing, and could only buy one book in the SF corner (Red Planent. R.A.Heinlein). Now i will be able to buy more Stross :). I like to buy books but really hate the big format Paperback : too big, too heavy (also, expensive). Too bad you don't make as much money from the massmarket paperbacks from amazon. I got hooked up on Stross prose when I got offered the 1st Family Trade in french tall paperback, and then downloaded Accelerando in electronic format.

.txt files. Ive got a Sony PRS-505, and I like it a lot cause its pretty simple.

I guess this is room for some start up web app, to allow writers to publish their work and then have a central site to handle the payments. Anyone know how the money works on the Audible.com service. I use them and haven't had problems yet. Although I have not read the fine print of their usage terms.

This is the BookSurge story, writ large. When there's a profit to be made, Amazon will happily mistreat anyone. (&, yes, they are anti-union.)

As to the Kindle et al: as a source of leased access to Amazon's book network, it's a pretty good device. But it's a monopoly, and Amazon charges about as much per ebook as they charge for paperback editions, and there's no way a buyer can do as much with an Amazon ebook that they can with a paperback. It has one advantage (size), and a host of disadvantages (can't lend, can't keep, can't sell, deal with Amazon, &c.) The price is too high, and authors aren't getting enough of it.

I'm a bit surprised that no-one's mentioned print-on-demand machines yet, which AIUI are beginning to appear in bookshops here and there. It seems to me that these can bring together advantages from both e-books (can't go out of print, always in stock) and traditional dead tree books (doesn't need a power supply, no DRM, can lend out or pass on). I think that's the way the dead tree book will go; it will save publishers and book-sellers a fortune in not having to keep physical stock, just generic feedstock for the machines.

I don't see print-on-demand and e-books as either-or, both have advantages and both satisfy a market need the other can't.

Book publishers aren't in the same position as music publishers. Tim Waterstone (chairman of HMV, founder of Waterstones) was on Working Lunch on Monday, he mentioned that last year was the first time since 1969 that book sales fell. They are up again so far this year. Book publishers are reluctant to change their business model as it is actually working quite well.

$1000+ a year for a webserver? Get a VPS from one of the major players, ~$30 USD or less a month for 100-300GB of traffic, this is an all text site, it shouldn't cost more than $400 USD to host, you could even have fail-over for less than $1k, and pretty much any flavour of Linux with whatever other software you want on it, then you wouldn't have to feel bad about payola ;)

Connor, it's handling inbound mail for several domains, a mailman server, spam filtering (of up to 60,000 spams a day), and web sites which between them get over a million hits a month. Also, it's in the UK (and I am not hosting my server on the other side of an intercontinental pipe). Also, there's other stuff which I'm not telling you about.

If all I wanted was web space, I could do it for a sixth the price. I have other needs.

Amazon have about as much interest in being a publisher, as Apple do in being a record label.

Neither of them want to put money / risk into developing artists, compared to taking a slice of the (new, cheaper, but still middleman based distribution).

Same applies for paypal - where there's a middleman handling the payment for digital goods, that's where there is profit to be made.

As comment says above - consumers appear to benefit as prices fall / stay low, but we end up with cultural degradation (similar to the effects of supermarkets and fast food restaurants on the food chain) - it becomes increasingly difficult for smaller artists to survive, compared to the Dan Brown's who can resell their rights for film, etc.

As for Cory - yes, he might make more from personal appearances than his books, but is that really a sustainable model?? Personally, I like to read books. I've attended two authors personal appearances in 30 years of reading books vs buying hundreds of books.

Roy @71: I crunched the numbers on in-shop POD for a business plan several years ago and the numbers were marginal then. It may have improved since, and the Espresso is certainly a big step closer. But, like everyone in this area, they are focussed on building (and patenting) the technology rather than working out what to do with it that breaks the publishing mould. POD is a big opportunity, but it's only fulfilling part of its potential if it's being used as a way of outputting the same books that are on the shop shelves anyway. And the price model imposed by mainstream and academic publishers doesn't allow anything more creative, AFAIK.

But that model is in turn dictated by the portfolio of publisher/author contracts in each publisher's backlist.

To get a better model, you need to (a) make a business case for it to each publisher, and (b) get the publisher to spend the money on lawyers to whomp up a new contract, and then (c) wait while they negotiate new contracts, going forward, for new books, and try to get agents and authors and dead authors' estates to sign up to new legal boilerplate with unfamiliar, frightening language, over the next decade.

I am though never, never going to read e-books. I hate the whole idea and just wish it would go away. I want my books lined up on the shelf where I can see them. I want to spend weekends reorganising them. I want to be able to lend them without fuss, buy them as gifts for people and wrap them up (giving people tokens isn't the same) with messages written inside, get them autographed by Charlie perhaps (how will autographs work for e-books?)

I know, it isn't going to go away, but I'll ignore it as long as I can.

On Amazon - I have them to thank for discovering Mr Stross's books, as it was a "recommendation" for Atrocity Archives that brought him to my attention in the first place. So they've done at least that good deed.

You might feel it's a good deed but Amazon are just the forefront of tomorrows marketing where all the data you generate is stored and (automatically) analysed. In the future the corporations will know more about you than you know about yourself. Think deep psychological analysis of your spending habits, even now Amazon could use its data to know about the subconscious suppressed sexual orientation of a customer and the unaware homosexual (no need to take offense, I'm speaking hypothetically) might be surprised that the next time he goes to his bank/insurer etc. he speaks to a young attractive male while he previously dealt with a young blonde female...

Think a bit further on and your PC/media station is online, as are your fridge, microwave and other kitchen appliances so your home system knows via RFID what you consume when and what parts of your media consumption have stimulated you to do so. If you are a senior your bed will have sensors monitoring your circulatory system. Your itinerary will be known via your phone (and the itineraries of other persons relative to yours), with Galileo appliances up to 30cm resolution even indoors...

Everything you do will generate a searchable and analysable digital trace.

If you are alredy astonished about todays recommendations by Amazon you'll be blown over by what marketing has in store for all of us if our societies don't get their act together as to the individuals right to informational self-determination. If we are not careful the current technological development will reverse the enlightenment as we all will loose most of our Mündigkeit (the english term maturity doesn't wholly fit) in the Kantian sense. To me it seems as if our (western) societies are already well on the way towards that.

We all should take an interest in the societal discourse (seemingly absent as it is of now) about where we want to go with such future possibilities or "the interests" will decide for us.

Meanwhile throw a wrench into the works: use Amazon to make odd gifts to people (have them send them to you, wrap and present in person) and spread your purchases over different shops.

For me the biggest problems with ebooks are logistical in nature. An ebook reader is just one more thing I need to carry with me. I only have so many pockets, and an ebook reader is not a pocket device anyway.

Also, please add the standard rants about the evils of DRM and of Amazon being able to remove content at their whim to this post.

David H @78: sure, you might not personally ever read an e-book, in the same way that some people will never buy a CD or take photographs on anything but film.

Nothing wrong with that at all.

But: you will be a minority.

I personally was staggered how quickly film cameras died. CDs have terminal cancer. Books are just another doomed of variety analogue presentation device.

Now, to go forward a little further: I predict e-readers as standalone (non-convergent) devices won't be a long-lived event. That LCD screen you're looking at right now, why can't that be widescreen colour e-paper?

Once displays are awesome, prevalent (and cheap): that's the total death of print. Digital storage is, to a first approximation, free. Books are small.

71 The technology isn't there yet. There remain several problems with the current generation of automated POD machines; in no particular order:
* for those few machines that can do color interiors, the color fidelity sucks; the pigments are horribly expensive (and will stay that way -- it's not just that there isn't enough volume, it's that they use some expensive ingredients that aren't going to get any cheaper due to their other uses); the resolution sucks; and all of the above makes the black text of visibly lower quality on pages that have color
* binding glues aren't good enough yet; they cannot tolerate temperatures after curing of varying more than 15C or so from room temperature for more than a couple of hours at a time... which includes the back seat of a car here in East Central Redneckistan in either January or July, and they're too brittle in the first place
* they still haven't solved the heat-transfer-onto-plastic problem for the regular old interior print
* they are nonarchival, as the paper required to get a good image is still quite acidic (not as acidic as the first-generation machines)
* when they break down, they're hellaciously difficult to repair, requiring a lot of unique parts and quite a bit of care from the technician

In my judgment, we're either three or four generations of auto-POD machines away from something that is acceptable for a book that is going to be kept, rather than read once and passed on/thrown on a shelf never to be read again. And generations in office equipment still seem to be on a thirty-month cycle...

77 Our Gracious Host is seriously understating the problem. If you look at the sucker contract (the one handed out to unrepresented authors as the "standard", in the rare event that they can get a contract offer) from any of the largest dozen English-language trade publishers, they all contain clauses that:
* were made obsolete by the Copyright Act of 1976 (US), Patent, Design, and Copyright Act of 1988 (UK), or coordinate statute changes in other English-speaking countries in that same time period
* were made unlawful in the US by the Bankruptcy Code of 1978
* reflect high-discount rates from 1979, in both North America and the UK (I can't speak for Australia, NZ, and RSA)... before there even was a Sam's Club/Wal-Mart, let alone Amazon
* reflect errors-and-omissions insurance requirements that are pre-1987
and those are the easy things to fix. If you really need any proof, just look at the bankruptcy proceedings for Byron Preiss Visual Productions, Inc.

I understand Charlie's "fear and loathing" of Amazon, but as an end user, I love Amazon and the way that it can point you towards "must read" books that I had never heard of before. I've even started to use the Amazon search engine a bit like Google, putting in a concept I'm interested in and seeing what books come up. Then I look at the summaries and associated recommendations and use them to search in Google and Wikipedia. I buy far more books now, and the online experience is far more enjoyable and productive than what I ever got at a bookstore or even (sad to say) a library... Staff who know nothing about books trying to push the latest mass produced idiocy.

For my tired old eyes, books are still far easier to read than any kind of display. So the only reson I would ever go over to Kindle would be so that I could carry a reference library in my pocket/bag when I'm out and about... not a bad idea at that.

The ownership issues are a problem and have to be resolved. I like the idea of being able to transfer a copy of a book to another person, but when you do this the software automatically deletes the book from your reader. Then when the person borrowing it gives/copies it back to you then it would be deleted from their reader. This way, paid for copies would stay in circulation but they couldn't be cloned. It would even enable the sale of second hand ebooks.

My own suspicion is that their sanity depends on the current printed book market. The promotional aspect is how they make money out of the Free Library element—I've bought books as a result of that—and they're also selling to people who want an advance copy—an advance reading copy text which may still have uncorrected errors, but with an upgrade to the final text—but actual physical books are still the prime product.

As a farmer, I had to deal a lot with monopsony. I wish I'd known the word so I could have used it at an NFU meeting. The last time I went to the County Show the stands of the old local grain merchants, companies mostly vanished, had been replaced in the prime positions by supermarkets and estate agents.

One big difference: wheat is a fungible product, assuming it meets testable quality standards. (And then one can wonder about the tests. The Hagberg Falling Number is the time needed for a ball bearing to drop through a mix of flour and water, and there is a legend of a load being rejected with a test result lower than for distilled water.)

Some books, at least, aren't. As Asda found out about Harry Potter. As an author of genre romance—Mills & Boon in the UK, Harlequin in the USA, are labels which spring to mind—an author may well be fungible. They tend to be shorter books, and I don't think it's an accident they produce so many infamous examples of bad writing.

Charlie's books are not a fungible product. Not in the same way as a can of beans. There is a brand identity, and an expectation of a particular gratification. Something else can satisfy the immediate urge to read a good book, and perhaps give me a satisfying emotional sucker-punch, but if I want a certain specific sort of nuclear carpet-bombing, Charlie is The Man.

Final speculative thought: if one of the big problems is that publishers, buying world-wide rights, do a piss-poor job of selling rights locally, could some second-tier publisher, perhaps in Australia or NZ, expand by doing a better job of re-selling rights.

Books are not the same as CDs or film cameras, because of one single fact - they are both datum and delivery medium. And CDs are far from dead yet, as anyone who refuses to build a musical collection on the basis of a compressed, abridged bunch of downloads that are gone if your computer and backup drive are both burgled/crushed/eaten by the same virus will tell you.

But until an ebook experience can offer the same level of useability as the printed book - and I mean all kinds of books, not just harback/paperback but also technical books, full-colour academic texts (e.g. medical, engineering), graphic novels and the full variety of colour reference and art books - it's unable to match the utility of a book. It may eat up the 'paperback' market, to a degree, but it is not a like-for-like improvement on the existing product, the way DVD or CD were to VHS and vinyl. The ebook is predicated on owning a dedicated reading device that, unlike the mp3 (which many people listen to on their pocket-sized phone these days)needs a screen size readable by most eyes - which will only really be feasible as a pocket device when roll-up/foldable screens become reality - and needs to have power to actually display the text. I have a PRS-505, and have been frustrated on more than one occassion to find, on picking it up after leaving it for a few weeks, that the battery is nearly dead. What do I pick up instead? A book of course.

A better comparison for book/ebook might be to compare to recorded music vs live performance - with the ebook in the former camp and the printed word in the latter. Printed books may increasingly become and 'event' product (for want of a better term)with the disposable medium of ebooks being the cheap option. Perhaps we should expect printed books to grow ever more lavish, with extras (likely with a complimentary copy of the ebook version downloadable via a single-use code on the back page). It will adapt, because print can still do several things better than the current digital equivalent. And the smart people in the industry will come up with new ideas.

Remember, the publishing industry already went through a similar upheaval back in 1936 when Penguin introduced the mass-market paperback. In a single change, you could comfortably carry a book in your coat pocket. It was portable and disposable. It didn't have the heft and feel, or the quality, of a harback book. And yet, looking around Waterstones, the hardback book isn't dead yet - it repurposed. Maybe that's what the printed word in general will have to do - repurpose.

Yes, bookstores as we knew them are doomed. Not because of ebooks, but rather logistics. Think on this...if you're a general bookseller, eg B&N, Tesco's, you're probably maintaining several thousand feet of bookshelves, a portion of which is populated by the member of the current bestseller list, but the vast majority will be backlist, hoping for that customer who just happens to be looking for that particular book about Christian symbolism in Narnia, and happened to walk in at the time.

Or, you're a specialist bookstore, eg Murder Ink, at which you have a community, but as in the case of Narnia booksearcher above, you're competing against the ease with which they can find and order those specialized titles via web and post.

Which means, like video game sales, your bread and butter is going to be the churn of the biglist + early adopters + new releases.

Now that being said, if you really want a bookstore, it's going to have to look like something completely different.

I've thought of something like a subscription library/book club, which would have a selection of titles of interest to members, as well as fulfilling orders for members, for titles which they're interested in collecting as objets, and of course, selling fancy coffee (members are of course entitled to one freebie a week). Add to this, say a POD machine, once prices permit, and package reception, ala the UPS store, for members' Amazon orders, and I think you might have something viable.

As to how ebooks will kill books, the order of slayage will go something like this:

For the record, I'm not an ebook reader yet, but that's just do to gadget research/capability at this point. I'm considering the iPod touch, because, along with the various and sundry file formats, it also has the Kindle app. At present, I am using my clever phone (LG Env2) to read newspapers and magazines (I mean, RSS feeds) via Google Reader Mobile. The downside is that it has no feed caching, and no independent reading capability.

Our Host @42 wrote in part:
"I wonder how ebooks would sell if, for example, they initially came out at a $20 price, and the price depreciated by, say, 5% per month to a floor of $5?"

I note that Baen sort of do that now, but with a more rapid descent in price.

First the single eBook eARC for US$15, then after a period ranging from a few days to a few months[1], the monthly bundle serialisation starts - at least four new eBooks for $15, then two months later the single eBook sales for $6 or so.

And if it is one of their best selling titles with a Baen CD-ROM, then Baen are also granting anyone and everyone permission to legally give away copies of the new eBook for Free, either by copying the physical CD, or via a legal free download.

Paradoxically I gather that some of these titles with included CD-ROMs (Weber and Ringo at least) are the same books that in the following few months sell 100,000 plus Hard Cover copies!

[Two weeks after the single eBook is available for $6 you can also buy the dead Tree Hardcover edition for $25 less discount, and a year or two later the mmp for $8 or so]

Martin.

Footnote:
[1] The Draft eBook serialisation as part of the monthly bundle and the single eBook sales are the fixed timings, the release of the eARC before that seems to depend on how early the Authors turn in the manuscript.

For the sake of anyone here unfamiliar with Baen's eBook sales via the Webscription.net
The timeline is IMHO most easily explained in reverse.

Single eBook sales ($6) of the final (4/4) eBook as published on paper in the middle of the month before paper publication.
Advance purchasers of the monthly bundle (at least four ebooks for $15) get 3/4 of a Draft text a month earlier.
Another month earlier (so about 10 weeks before paper publication) they get 1/2 of a draft, and everyone gets 1/4 as free sample chapters.

And it is a variable period of time before that that they sell one or two of that month's lead hardcovers as a complete 4/4 draft eARC for $15 each.

If bookstores were doomed you would expect to see declining sales and profits and few market entrants, pretty much exactly the opposite is true. There has been a pattern of consolidation and growth. Waterstones has centralised its logistics system, gaining efficiencies of scale compared to the shops dealing directly with the publishers, while having a management structure which gives the branch manager wide discretion over which titles to stock. Meanwhile the supermarkets have expanded their range of books as they have enlarged their shops.

Brett, your perspective is too local. In the UK, Waterstones is a de facto near-monopoly -- since the Ottakars takeover they've got something like 40-45% of the non-second-hand bookshop space in the UK; that's hardly healthy for the industry as a whole. During their time under HMV they were if anything reducing branch manager discretion -- hopefully that trend is reversing, but if so, I'm not hearing about it.

In the US, Borders have been in trouble for ages -- they sold off their non-US stores, and in January replaced their CEO and CFO. Barnes and Noble aren't doing as badly, but sales in Q2/09 were down 5% on the previous year, with a forecast decline of 1.3% in Q3. Back last autumn one of the major magazine/paperback distributors went Chapter 11; luckily they restructured/refinanced, but the entire mass market paperback distribution chain was left tottering for a few months and nearly collapsed. (Guess who gets to see the fallout from that in his royalty statements this year?)

Finally, supermarkets stocking more books is probably bad news for authors and publishers -- as noted elsewhere, supermarkets generally fuck their suppliers hard, and in publishing the margins to support that kind of behaviour may not be there (especially during a savage recession).

For those who don't get the e-ink thing, its worth trying out a decent reader for a little bit first. It is a vastly superior reading experience to a conventional LCD screen. Definitely comparable to paper.

I personally wouldn't have a problem with DRM if it was a cheaper option. Digital Rental Management is what it should stand for, with DRM books being priced appropriately for a single train journey (i.e. 1.50-2.50). At that price its disposable, easy to take a risk and I suspect publishers would find a much bigger market opening up to them. Of course expecting innovation from publishers is a mug's game...

For those who don't get the e-ink thing, its worth trying out a decent reader for a little bit first. It is a vastly superior reading experience to a conventional LCD screen. Definitely comparable to paper.

I personally wouldn't have a problem with DRM if it was a cheaper option. Digital Rental Management is what it should stand for, with DRM books being priced appropriately for a single train journey (i.e. 1.50-2.50). At that price its disposable, easy to take a risk and I suspect publishers would find a much bigger market opening up to them. Of course expecting innovation from publishers is a mug's game...

1) Amazon's only guarantee on Kindle prices is that bestsellers will be $9.99; other books do range higher (often much higher -- I market technical books to professional audiences and my US$50-$125 books are priced similarly in Kindle editions) and occasionally lower. Major fiction books in popular genres tend to approach or hit $9.99, which feeds the popular conception that price is the standard. And of course Amazon encourages that conception.

2) As far as I know, Amazon's terms for Kindle editions are broadly similar to those for printed books; they're not getting massively higher discounts. This implies that they're losing money on most, if not all, of those $9.99 Kindle editions. This further implies that they're willing to lose money for a while to drive out competition -- and those of us who have followed Amazon for the past decade can cite several instances when they've used that tactic successfully, only to increase prices later once they had a dominant market position.

So I believe your #4 is incorrect in precise details, though the end result is likely to be very similar.

I've always thought the ebook market is slightly different to music, movies and tv in the way that it's move into the digital world could take place. Because weirdly I don't think that ebook readers improve the reading experience over a paperback, the only time they do is when you need to carry alot of reading material around and then the bulk of a normal book becomes a problem. Plus the ability to buy a book any time and any place would be useful.

The thing is the solution seems painfully obvious to me, everytime you sell a hardback copy of a book you give away the ebook for free. People who buy hardbacks are fans, they want those books up on a shelf, where they will probably stay, giving them the ebook for free the moment they buy it just makes it more convenient for them to read and sweetens the deal. For the paperback sell the ebook at the same price as the paperback minus the printing and distribution costs of the paperback.

The reader thinks their getting a fair deal, the mighty threat of digital has been conquered and everyone is mostly happy.

Won't ever happen of course because where digital is concerned the publishing industry like all content industries believes that their customers are criminals and secondly they hold out this vague hope that technology will allow them to exercise more control over their creations once they're out in the wild. Ironically in doing this they've been corralled into the waiting arms of Amazon, who have their perfect dystopian publishing platform ready to roll.

And I have no sympathy with the publishers, they saw this happen with music and the virtual monopoly that apple has as gatekeeper to the customer and now amazon is going to do the same for books.

Rob: funnily enough music publishers and book publishers are not the same people.

(However, the folks at board level in the media conglomerates who own them are. And they listen to the music folks first, because they make more money for them and hit the electronic/online distribution headache first.)

@96 Rob wrote that he didn't think "that ebook readers improve the reading experience over a paperback"

Personally, with my Cybook Gen3, I DO find the reading experience much better than a paperback, but overall not as good as a Hardcover, except that it it also wins over the Hardcover for one handed reading.

He also wrote
"everytime you sell a hardback copy of a book you give away the ebook for free. .... Won't ever happen of course"

I note that one of the Major SF publishers (Baen) has been doing just this from time to time (19 times or so since 2002) with their best sellers including a CD-ROM.
(except that they also allow the eBook to be given away to anyone and everyone regardless of whether or not they have bought a HC)

And with all their Hardcovers there is also an eBook edition sold first for less then paperback prices.

I know this if off the topic, but I'd like to thank CE Petit at #40 for inventing a font for sarcasm, and likewise one for irony. eg "Gee, a merger/acquisition would never occur in the publishing industry, so why are we even worrying about it?"

And also for explaining a new word, "monopsony", which likewise will be useful. Tho why we would ever need such a word escapes me

Gleg, monopsonies are a lot commoner than you think, but function somewhat differently to monopolies. It's an important word that too few people understand -- like "deflation". (Everyone gets "inflation" because we're used to it happening within living memory, but "deflation" -- if it's the opposite of inflation, what could possibly be wrong with it? And so on, until somebody explains in tedious detail.)

Sometimes monopsonies work in the public interest -- when they're a buffer between the public and huge corporate suppliers, for example. The British NHS is an example of a monopsony, when it comes to buying prescription medicines: if the drug companies try to shove up their prices too high, the monopsony can dig its heels in and say "no". (When I say "too high", the current price threshold seems to be US $50,000 for a cancer treatment that gives a third of the folk who take it an extra six months' life expectancy -- we're not talking quibbling over aspirin here.)

And sometimes monopsonies work against the public interest.

For example: the US Department of Defense is a military monopsony -- if you're a US aircraft manufacturer and you can't sell your main battle tank to the Army, who else is going to buy it? -- Which in turn fosters monopolistic behaviour in certain industries: right now, there aren't many companies in the main battle tank business, for example.

"Here's what I don't understand: why do you need to go through a publisher at all? Can't you sell your print-it-on-a-tree rights and your electronic rights separately? If so, is there any reason (in principle!) why you couldn't run your own ebook server, or get together with other authors and run one collectively?"

Part of it is because it takes a lot of work beyond the writing in order to turn out a professional quality book, even in electronic format. As little as we like to admit it, authors need editors to help them decide which of their brilliant ideas is actually making the book better. There's also a need for copy editing, proof-reading, page layout (Amazon does NOT may any of this as easy as they claim), and even on an e-book you need cover art and blurbs, etc. Then there's the process of having to convert the book into not just one format but many; PDF, EPUB, Mobi, Mobipocket, etc, which, even if you have the final mss. from the hardcopy publisher means you've got to reformat, re-edit and reproof it because the various conversions and codings can screw up the the text but good. Then there's getting it out into the various communities and ebookstores, and the accounting once it is out there.

This can take between 10 and 15 hours per book per week, which amounts to a second part time job for people for whom writing is sometimes already their second job.

I'm finding out all about this because I'm an author-member of and project manager for Book View Cafe (www.bookviewcafe.com), which is exactly what you describe, an author cooperative offering ebooks for sale direct from the authors to the public. There are 20+ of us, all pros with a collective century of experience in the publishing world and while we're making strides, it's slow bumpy going. Among our issues have been nobody has done quite what we're trying to do, so there's no publically available software to do it, at any price. We know because we've looked. So we're limping along with the services of one programmer (to whom we are all extremely grateful) who is doing it for resume fodder and because it's fun (programmers are strange, and she admits this, and we remain EXTREMELY grateful).

Oh, and did I mention we're doing this with no money except dues from the membership?

Obviously, I believe this is a viable model, at least on small scales, and that we can successfully siphon some of our money back from Amazon and Sony, and eventually Google, but doing something that's never been done takes a LOT of set-up, much of it unexpected and unforeseen and very little belongs to what might be thought of as the "normal" skill-set of the working author.

Gleg@102:A monopsony is a condition in which there are many sellers but only one buyer. Seems like a trite enough definition, but it has significant consequences in labor markets, or 'the' labor market when talking about verities like class war. Think about, say, the UAW in the United states and the Big Three auto makers - Ford, Chrysler, and GM. Now, despite what some people say, an autoworker is a skilled employee(at least in the middle to upper end.) But the fact of the matter is, realistically, only three companies can employee him. How to counterbalance this sort of advantage? Unions, and with all the history and consequences that entails.

Another consequence of monopsony power is the minimum wage. Weirdly - that is, if know more than libertarian 101 economics - it turns out that for monopsonistic reasons, raising the minimum wage can actually increase employment. Ah, you might find this graphical analysis enlightening. There's probably a better explanation out there, but I'm only going to google for a couple of minutes.

I keep wondering if there might be a different pricing structure that could benefit both writers and readers. If writers could embrace a lump-sum payment for their work rather than per-copy royalties and if readers could agree to purchase an entire list of books (some of which individually are not that interesting), could this work?

Say R readers of sf agree to pay D dollars per year for the works of W writers (who average B books per year).

Charlie wrote: "For example: the US Department of Defense is a military monopsony -- if you're a US aircraft manufacturer and you can't sell your main battle tank to the Army, who else is going to buy it? "

Well, probably nobody and they should get back to their core competency of making aircraft. :)

You might be able to find a set of numbers that would be agreed to, but the agreement would only actually hold for about ten seconds before the first proto-reader said "I only want half of these, I should only have to pay half the amount". And people would be arguing about individual copies again. (And then, of course, there's the separate issue of new readers who want to try one or two of the books but don't want to subscribe to the entire bundle, and so on.) You almost certainly can sell books like that (it's not so different from the webscription bundles), but individual copies will definitely survive the idea.

There is at least one independent ebook outlet (Smashwords.com) which is paying reasonable royalties, especially considering that they are basically a hosting service and doing relatively little promotion. (However, they do now have a deal to feed selected content into Barnes & Noble's ebook store).

It's unfortunate that, as Charlie notes, commercially published authors don't generally have the option to use services like this, or Podiobooks.com (free podcast audiobooks mostly read by the authors, with for-sale, ad-free downloadable versions coming soon at, again, good royalty rates). In many ways, self-publishing gives you more flexibility and control, but because you're having to do your own marketing you end up with a bigger slice of what is usually a very much smaller pie.

In 106 Bob's proposal was for lump sum payments, rather than a per copy royalty.
In 109 Chris noted a similarity to Baen's Webscription monthly bundles.

I may be wrong, but I thought that Webscriptions did pay out on a Royalty basis - a percentage of the sales revenue going to the Authors, rather than a fixed amount.

With the bundles, IIRC the payment is split between the various Authors unevenly, based partly on the dead tree print runs and/or initial sales of the included new books, so that the best selling authors get a bigger cut than midlist or new authors.

Martin: webscriptions do indeed pay royalties -- the "cover price" is AIUI split between the books in the bundle for accounting purposes, and royalties are then disbursed according to the various authors' contracts.

(Oh god, royalties. I am sitting on a sofa, typing on a laptop. Next to me a cat is snoozing on top of a half-inch thick stack of paper. It's not a manuscript. It's six months of royalty statements from one of my publishers -- about 35-40% of my books in print. There's over a hundred pages!)

Waterstones do have a large share of the high street bookshops, however the competition commission decided the relevant marketplace was the total book retail market, which includes on line sales, book clubs and supermarkets. The area that is really getting squeezed is the traditional logistics and distribution, Amazon, Waterstones and the Supermarkets use their own centralised ordering systems which has given a cost saving compared to the traditional distributor. Aggressive spending expansion is not normally seen unless you believe that the market is likely to remain profitable. It sounds like the US high street book retailers would be an attractive takeover target for UK booksellers looking to expand as they seem to be less effective book retailers.

Are author royalties based on the cover price or on the price actually charged?

I am a lot more likely to buy a sub £10 hardback I bought the hardback of wireless for £8.99, while if it had only been available at the cover price of £14.99 I would have waited for the paperback. As I understand it the royalty rates for hardbacks are, higher the cover price is higher and, as they come out first, you get the money sooner.

Brett: Are author royalties based on the cover price or on the price actually charged?

It depends.

If you don't read the fine print before you sign the contract, you may get stung with a percentage of net payments received for sales, rather than a percentage of the undiscounted cover price. But even if you get a percentage of cover price, there will be options for discounted sales, in which case your royalties are discounted accordingly. The difference is that this discount won't apply to all discounted books -- only to those sold through specific wholesale channels.

(A typical English language publishing contract runs to between 10 and 15 pages of small typeface single-spaced legalese. It's not as vicious and evil as a film/TV option contract[*], never mind a full-on movie production contract, but it's at least as impenetrable as the deed of sale on a house.)

[*] After signing, count your fingers, just in case. If so inclined, also count your immortal soul.

Not sure if you're aware, but Australia is currently deciding whether to relax restrictions on book imports - currently its basically a breach of copyright for a bookstore to import overseas books if they were published in Australia within 30 days of being published anywhere (see http://www.pc.gov.au/projects/study/books although it looks like the government is going to basically keep the current scheme)

I enjoy your (and other authors) books, and really want you all to keep writing (and earn enough to encourage others to write, too), but it seems like the effect of this is for us to subsidize overseas sales. *Excluding* the Amazon 4-for-the-price-of-3 promotion, I can buy all five of your merchant prince books for US$46.43 plus shipping. The fifth book alone here is AUD$48, or ~US$43, and all five are AUD$109.35, or US$99.44. And still '7-10 days', and even more expensive (and longer) from one of the chains.

The Australian price includes 10% sales tax, but its still almost double. And remember I've ignored the 4-for-3 deal on Amazon.....

The shipping kills the deal unless you want multiple books, though. If someone will sell me ebooks (un-DRMd!) for a reasonable price I'll happily buy them, but I won't pay 80-90% of the price of a 'real' book for something thats DRMd and won't run on my iPhone or whatever other device I happen to have in a few years, and that I can't sell on/donate to the local library/etc.

I bought more books while in the US for a few months earlier this year than I have in the 5-6 months since I got back home to Australia, and some of those were from Amazon anyway.

(Of course Amazon did manage to ship me a copy of the Atrocity Archives that replaced the middle third of the book with a copy of the last third, but noone's perfect...)

Honestly, I'm quite confused about the entire pricing scheme. If the cost to produce a hardbound edition runs to $15 per copy and the cost to produce an ebook is essentially nil, why is the publisher expecting to collect as if they produced a physical product? I certainly understand that everyone in the chain (including the author) expects compensation for their work, but after subtracting actual hard costs, there seems to still be plenty of revenue to spread around at $9.99 vs. $23.95.

If this is a vestige of the convoluted contracts authors are expected to sign, I guess information anarchy is still a long way away. :)

I personally don't understand the allure of a digital reader. Other than an occasional discount which can be had for paper editions if one searches, I have yet to perceive a single, actual benefit that makes it superior to the printed word. Someone sell me a waterproof and shockproof reader! Let me take my reading to places hostile to paper and ink. I can certainly find a use for one of those.

@122 Bill, I think that your premise is wrong.
I don't think that there is such a large disparity in production costs.
My understanding is that the cost of paper and ink and printing and warehousing is only a few dollars not 15.

I think that you will find that a Publishers other costs are considerably greater than the cost of printing.

Good quality eBooks from a proper publisher have all the other costs just like paper - Marketing and advertising cost, Royalties, other overheads, Salary for Editors, Proofreaders, and other staff, profit margin for the owners of the publishers etc.
Plus the cost of server hardware and bandwith and IT support.

Of course publishers of dead tree that books that also sell eBook editions of those titles have savings on the Marketing and editing and Proofreading costs.

Let me see if I understand:1) eBooks will replace printed books, just like downloaded mp3s will replace CDs.2) Kindle has given Amazon control of the eBook market.3) Amazon is denying access to the eBook market, unless publishers agree to sell at prices that make producing quality books unprofitable.4) Publishers are not responding to the Amazonian threat, because they are mired in old contracts and loathe to leave diminishing-but-still-profitable methods for new-and-less-profitable ones.5) Readers, like me, tend to assume that the major cost of publishing is eliminated by eBooks; and that eBooks should therefore cost very little.

I've read that the music-producers became nervous at Apple's near-monopsony of downloaded music. That resulted in the rapid emergence of DRM-free music sold through Amazon. I wonder is the turnabout scenario playing here? Will Apple be the "white knight" seller for eBooks that Amazon was for music?

nirvana_grace: pretty much, yes. You probably missed (6): authors (the primary source of supply) are pretty far down the food chain and prone to being trampled by the big guys as it is. And unlike musicians, novelists can't monetize their output by live-gigging. We need to find an alternative model to help us earn a living -- but Amazon aren't helping.

NB: I forgot to close this thread on time. So I'm closing it now (before the spammers close in). Bye!